Transcript

Ireland was the first country in the eurozone to slip into a recession, and has now bounced back and proved to be fertile ground for the financial services industry. One company that has taken off in the country is Mediolanum Asset Management. World Finance speaks to company representatives Furio Pietribiasi, Adrian Doyle and Luc Simoncini to find out about the organisation’s latest work and products.

World Finance: Furio, what is the benefit of being located in Ireland?

Furio Pietribiasi: The beauty of being located in Ireland is that we have the leaders in the financial service industry, and it has grown now to the most recognised financial service centre in the world, particularly for mutual funds and asset management. Together with technology, because technology nowadays is a big important part of our business and how we innovate in our business. In particular for the component linked to the clients, where more and more we are challenged to provide new services. So Ireland is offering the perfect ecosystem, where you have the leaders on the IT, if you think about this, the cloud capital in Europe, and the internet capital in Europe, and together as the best financial service providers and consultants and supports which enable an organisation like ours to scale very easily up our business over the time.

[W]hat we want to do here is to ensure that we’re going to create products that are going to be relevant for our clients needs

World Finance: Very interesting. Now Furio, how does Mediolanum stay competitive as an asset manager?

Furio Pietribiasi: We actually have made a clear choice in what role we want to have in the asset management industry. More and more, the industry is becoming competitive. We have on one side active management, which is becoming a very important component of the savings and the savings for the clients, but as well it is a very challenging to be successful, and there are less and less that are successful in the space. And then on the other side we have a lot that are moving to the passive management, which again is growing faster and faster. What we have decided to do is to combine what we are good at, and using our skill in combination with the skills of the very good asset managers out there, and to package the best products for our clients that directly address their own needs, and we evolve with them over the time, their needs evolving as well together with the market’s.

World Finance: So Luc, tell me, how do you tailor your products?

Luc Simoncini: Our product development process, MedInSynC, is not just a series of sequential steps. What it is is that all our solutions are developed, evolved and supported with our brand values, core brand values at the heart. So what are they? Three brand values. One is client-centricity. So what we want to do here is to ensure that we’re going to create products that are going to be relevant for our clients needs. It is also investment quality. So what we want to do is to focus on the commercial promise that we made and we can deliver that, but from an investment perspective, so we’re going to be looking at that through MedCube, our investment approach. And the third, brand value, is execution excellence. And what we focus here is to the efficiency of the delivery of our service and products, and what we are aiming to do is to make sure that our clients, our distributors, are delighted by their Mediolanum experience.

So all these three brand values that we’ve seen are embedded together in our MedInSynC product development process to make sure that our clients at the end have an outcome which is a superior outcome for their needs. What is interesting is the journey doesn’t start and stop with the product launches, we go further, because we know market changes, we know our client needs will change, and we feel strongly at Mediolanum that it’s our duty to respond to these changes, to all the time try to figure out how we can evolve our products so they can respond to the changes needed by our clients. And the way we do that is by incorporating our client and distributors’ feedback to improve gradually, incrementally, the products so that we can always deliver on our promises. So I think that’s one of the great advantages of MedInSynC, and if it’s one thing you want to remember, it’s that capacity to allow both our distributors on one side but also our clients to invest in confidence, to invest in Mediolanum solutions that are going to be relevant for them over the long run.

[T]he client is at the forefront of our thoughts when we manage our investment solutions

World Finance: So Adrian, tell me, how do you manage your products?

Adrian Doyle: Well the client is at the forefront of our thoughts when we manage our investment solutions. Our asset management model, whose cornerstone is the investment process MedCubed, focuses on external and internal skills. There are three primary performance drivers in MedCubed, the first of which is asset allocation. This is the most important, and the lever for product personalisation. The asset allocation team combines models that include fundamental macro-analysis, technical analysis, and investor positioning, all of which to determine where we are in the investment cycle of an asset. The second area is management selection. This is where we use a multi-factor approach to combine the optimal blend of best in breed managers to deliver diversification benefits. The third is security, where third party asset managers identify the best securities for our needs. So investment returns are obviously very important, but more important is managing risk and preserving capital. These are essential to long-term wealth creation, so therefore we have a dedicated risk team that looks at operational and financial risk.

In the financial risk, along with traditional risk metrics, we also have developed a program called Mapping the Rocks. Mapping the Rocks combines, in conjunction with investments and risk, to try to identify potential tail-risks in the markets. So overall, through our MedCubed investment process, plus disciplined risk management, we can deliver excellent risk adjust returns for our clients.